Wake Up, Web3: Your Marketing Is Fueling a Bot Epidemic

This op-ed is part of CoinDesk’s Web3 Marketing Week.

Currently, marketing budgets are being allocated to individuals who engage with Twitter posts and follow projects – think of it as similar to Galxe. However, MarketingFi aims to innovate in this area by rewarding not just anyone for minor actions, but rather giving incentives to highly engaged users. Instead of dispersing small rewards among a multitude of users (including bots and potential Sybil attackers), MarketingFi focuses on bestowing larger rewards to those who contribute value to projects through active participation in marketing initiatives.

In the realm of Web3 Key Opinion Leader (KOL) marketing, which is the second most popular and rapidly expanding trend following airdrops, many challenges remain unresolved. Many projects engaging in KOL campaigns unwittingly recruit hype generators with inflated metrics to fuel initial excitement. However, these individuals fail to attract genuine users who should be the primary focus of marketing resources.

In the data-driven MarketingFi platform, it’s essential to distinguish true Key Opinion Leaders (KOLs) from those who merely create hype but lack genuine influence. The latter, often referred to as “Shillers,” can inflate project costs with their demands for substantial rewards and marketing budgets, only to abandon the project once it’s launched.

So what exactly is MarketingFi, and how can Web3 get there already?

“If my users possess my tokens, they expect me to make effective marketing decisions since my project’s growth directly impacts them – how can I delegate some of my marketing budget to them so they help in attracting more high-quality users?”

70% of most airdrops go to bots

At present, the crypto space is experiencing what’s being referred to as “Airdrop Season” in the Web3 world. Numerous new airdrop initiatives with social farming aspects are emerging rapidly. The financial resources allocated to these campaigns are substantial, leading to increased excitement, anticipation, and expectation. However, a significant issue arises from this trend: a large proportion of airdrops end up being claimed by bots, airdrop chasers, or Sybil attackers instead of the desired target audience for the projects. According to our research at Cookie3, approximately 70% of an airdrop’s distribution can be attributed to these unwanted participants.

Airdrops aren’t destroying Web3, contrary to some beliefs. On the contrary, they can be quite beneficial when used effectively. The key lies in attracting high-quality users – those who are genuinely interested and engaged with the project. Not every airdrop leads to this outcome, but projects that take their time and prioritize quality over quantity are beginning to recognize this. A prime example is Layer Zero, which set the standard for self-reported Sybil activity, demonstrating the potential of thoughtfully executed airdrops.

In the current market, there are effective methods available to project managers and marketing teams to keep bots out of airdrops, such as Cookie3 Airdrop Shield which employs AI technology to identify bot-like behavior. However, it’s crucial for a shift in perspective: short-term gains from bots, including hype and quick success, come at the cost of long-term retention. To implement this change, utilize data analysis to weed out bots during airdrops and allocate more tokens to a smaller audience. This approach can foster continuous excitement and progression for your project.

KOLs or shillers?

One potential way of paraphrasing your question could be as follows:

One effective way to identify influential Key Opinion Leaders (KOLs) who attract high-quality users for marketing purposes is by utilizing analytics. By closely monitoring and evaluating user conversions stemming from KOL promotions, marketers can distinguish the most productive KOLs from those contributing empty numbers. Collaborating with these successful KOLs to further optimize their influence and target audience alignment will not only enhance campaign performance but also foster effective and fruitful marketing partnerships.

With the establishment of a uniform standard, there will be an increase in accessible data regarding Key Opinion Leader (KOL) quality in the Web3 marketing sphere. This enhancement will subsequently improve the overall quality of KOL marketing efforts. At Cookie3, we are developing a solution through our Cookie3 Affiliate platform. This innovation enables projects to establish clear terms and guidelines for onboarding KOLs, assess genuine conversion and influence, and delegate portions of the allocation to $COOKIE token holders – thereby engaging early adopters and motivated users eager to discover emerging projects.

In the shift from Web2 to Web3 marketing, it’s essential to remember that the value of an engaged and converted user significantly outweighs that of a potential or low-quality follower. This principle, derived from traditional marketing, should be mastered first. Once this foundation is solid, marketers can embrace the decentralized essence of Web3 by distributing budgets to committed quality users, transforming them into co-owners and collaborators. This approach fosters enduring growth in a truly Web3 manner.

Web3 markets need to wake up and realize that results-driven does not mean vanity metrics. Results driven in Web3 must be understood as data-powered decisions, community-driven campaigns, and long-term success building through directing budgets to users who bring quality to projects.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.